REQUIREMENTS TO SET UP OPERATIONS IN A FREE TRADE ZONE Setting up operations in a Free Trade Zone involves four general steps:
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Having an individual or legal local or foreign Company which may obtain authorization to be a free trade zone user. Signing the respective lease agreement with the Free Trade zone chosen. Each Free Trade Zone defines its lease rates and general services that it provides. However, lease rates are between US$ 2/ m2 and US$ 5/m2 depending on the location of the free trade and the total area which will be used. Processing the qualification of the Company with the Ministry of Economy to be a Good Producer User or a Service Provider User, to include trade activities. Once the User has received authorization from the Ministry of Economy, The Tax Administration – SAT- enables the Company to engage in importation and exportation to and from the Free Trade Zone, free from the payment of taxes, and authorizes the issuance of Invoices for the export of goods or services. These Invoices, which are called “Free Trade Zone User Commercial Invoice” are issued in US$ and no taxes are levied on them. This Invoice is the main support document for exports, which need a Single Customs Declaration (DUA in Spanish).
FISCAL BENEFITS
OTHER BENEFITS Each Free Trade Zone has a Customs Office in its facilities which is responsible for verifying the entry and exit of goods, vehicles and persons. Usually, these procedures are more agile *in time and cost than in a general Customs Service because companies are operating physically in a Free Trade Zone and their import and export processes become habitual. Every Customs control procedure must be met in every case. MAIN OBLIGATIONS The main obligations to be met by companies that are authorized to operate in a Free Trade Zone are: • Every Free Trade Zone Company must file the electronic Social Security (IGSS in Spanish) form on a monthly basis; • Producers must file with SAT, on a monthly basis, a production coefficient report as defined for their productive processes; • On a quarterly basis, the “statistical form” outlining investment, jobs and wages paid during the quarter must be filed with the Ministry of Economy; • On an annual basis, and within the first two months of each year, the Ministry of Labor and the Ministry of Economy must receive the workers’ payroll of the company; • The Company must keep a permanent inventory system; • The Company must allow any necessary inspections required by the Ministry of Economy and by Customs.
• Exemption of Import Tariff Duties (DAI in Spanish) and of the Value Added Tax (IVA in Spanish) on imports and on local purchases. • Exemption of IVA on goods transfers within and between Free Trade Zones. • Exemption of the IRS for 10 years for all exports made from the Free Trade Zone outside of Guatemala. It should be noted that sales made from Free Trade Zones to Guatemala are not IRS-exempted.
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